How to amend your tax return

IRS Form 1040X Is What You Need, but There Are Restrictions

Tom Herman

April 19, 2014 8:29 p.m. ET

So you've filed your tax returns by the deadline and don't want to think about it again. Then a friend tells you about a valuable tax break you didn't know about—and you suddenly remember a few deductions and income you forgot to include. What to do?

Use IRS Form 1040X. Most of the instructions are fairly simple, though there are a few twists. Here are some pointers, based on a recent IRS "tax tip" and interviews with tax pros:

You can't file Form 1040X electronically. "Even if you filed the original return electronically, the IRS still requires the Form 1040X to be filed as a paper return," says Mark Luscombe, principal federal tax analyst at Wolters Kluwer. CCH.

If you amend your return, you won't be the only one. "We now get about 4.7 million amended returns a year," an IRS spokesman says.

There are time limits, says Stephen W. DeFilippis of DeFilippis Financial Group in Wheaton, Ill. Typically, to get a credit or refund, you have to file an amended return "within three years (including extensions) after the date you filed your original return or within two years after the date you paid the tax, whichever is later," the IRS says in Form 1040X's instructions.

But there

are exceptions. For example, the time limit "can be suspended" for "certain people who are physically or mentally unable to manage their financial affairs," the IRS said. Also, there are special rules for bad debts or worthless securities. See the Form 1040X instructions.

"You normally don't need to file an amended return to correct math errors," the IRS says. It will "automatically make those changes for you." Also, "do not file an amended return because you forgot to attach tax forms, such as a W-2 or schedule." The IRS "will usually send you a request for those."

If you're amending more than one return, prepare a 1040X for each year. Mail each year's separately.

If you owe more tax, file Form 1040X and pay as soon as possible, the IRS says. "This will reduce any interest and penalties."

Suppose you suffered significant casualty or theft losses in a place later designated as a federal disaster area. You have a choice. You can deduct the losses on your federal return for the year in which the losses actually happened—or for the year immediately before the year of the disaster. If you've already filed for that previous year, file an amended return for that year.

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